Are property taxes deductible?
Property taxes are deductible. Deductible real estate taxes include the following:
1. When you are selling or perhaps buying a home, the taxes paid at closing are deductible.
2. Taxes paid to your town or county’s assessor also are property.
It is easy to claim the tax deduction. You itemize your deductions on Schedule A Form 1040.
You can make property tax deductions for the following:
• Foreign property
• Primary homes
• Vacation homes
Deductions are made for the year you made your payments. This means if you pay your property tax in December 2016, claim the deductions on your 2016 returns. As well, if you pay your property tax with your mortgage, you have to wait until your lender pays up before you claim deductions. What you deduct in your tax returns is exactly the amount your bank pays to the IRS, which may vary yearly.
If you are a Coop member, you can only claim deductions for your share, not all that was paid by the corporation. This is also true of multiple owners of real estate. You can only claim your deduction from what you paid.
What You Cannot Claim Deductions For
• Library taxes, trash collection and anything else that is not related to property value. Fees for delivery of services are not deductible.
• Flat fees to satisfy fines.
• Rental property or business property. This is usually claimed as an expense
• Property that belongs to someone else.
• Local improvements like sidewalks and streets. Local benefits assessments are not deductible
Buying a Home
If you purchase a home and accept to pay the sellers delinquent taxes arising from an earlier year at the time you acquire the property, you cannot deduct them as you make your tax returns. Such payments are treated as part of the cost of buying the home.